Consumer Confidence: Beware the Headline

The Wall Street Journal headline: 

"Consumer Confidence Soars
Amid Strong Start to 2006"

Now take a look at the data:


That last data point, the small increase, is confidence soaring.  In truth, confidence is pretty stable.

Background: if I were selling to consumers, I’d rather know the fundamentals than their confidence.  That is, tell me about unemployment, inflation and interest rates, and I’ll tell you about spending.  Surveys of consumer confidence usually doesn’t add much information (though they can after major non-economic events).

Business Implication: Consumer atttitudes stable; no need to change strategy now.